Should E-books Be Free (and have ads in them?)

I’ve got a lot of responses from last week’s article on using free books now to attract fans that will pay for books later. I started thinking more about the concept after the post and realized that in a lot of ways mediums like TV, radio and apps already have a model that makes money while giving the product away for free; ad supported content. Maybe this concept can work for e-books as well.

As a reader and an author, what is your position on ads in e-books? Do you think the business model of free books supported by ads is a viable? I know Amazon and Microsoft have explored this option on a corporate level, but do any of you have experience doing it on the self-published level?

Also, does anyone have any companies or advertising networks they could recommend if someone did want to explore the e-book advertising option?

Thanks in advance.

Gamal